Chewing gum could never have imagined that it was not the opponent who defeated him, but the mobile phone.
■ Wen | Ye Kefei, a financial columnist in Ichijing
How long have you not chewed gum? It's not just about your personal habits, it's about the economic model.
There was an interesting report last year that in the 10 years since the iPhone was launched, chewing gum sales have dropped by 15%. Why? It starts with chewing gum marketing.
The easiest place for us to see chewing gum is the shelf next to the supermarket cash register. This is also a classic setting in the field of supermarket marketing, that is, to put some flowers and greenery but people will not buy the gadgets, buyers wait in line when bored, will buy by hand, which is what the industry calls "impulse consumption".
But with the advent of smart phones, people do low-headed people when queuing up, and the attention to chewing gum is naturally reduced, and the probability of buying is also greatly reduced.
In my opinion, the sales of chewing gum in the supermarket channel will continue to decline in the future. The reason is simple, with the development of mobile payment, many people are more willing to choose self-service billing, and they have no opportunity to pay attention to chewing gum.
But even so, chewing gum still has a huge market of more than 10 billion yuan in China, and the competition is very fierce.
First, human beings have loved to "chew glue" since ancient times.
Hong Kong and Cantonese people are accustomed to calling chewing gum "gum", and a "glue" word says the key - the raw material of chewing gum is "gum", that is, natural resin.
Archaeologists have found that long before there is a historical record, early humans have liked to chew natural resin for fun, which is the most primitive chewing gum.
For thousands of years, people around the world have had similar habits. The ancient Greeks used resin to clean their teeth and make sure their mouths were fresh, the Indians loved to chew the sap of tree trunks, and the Mayans loved to chew gum gum. During the Eastern Han Dynasty, Emperor Huan of Han liked chicken tongue, so the ministers were accustomed to discussing state affairs with the emperor with this stuff.
Chewing gum in the modern sense originated in the United States. In 1848, the first processed chewing gum was born, created by a man named Curtis. He boiled the first pot of spruce resin, cut it into slices, sprinkled it with corn flour so that it would not stick together, and finally wrapped it in paper for easy carrying, which was very popular. A few years later, he founded the world's first chewing gum factory in Portland. He also tried to make a gum candy made of paraffin wax, and historically added vanilla and licorice, hence the name "chewing gum".
In 1869, the first chewing gum made from gum gum was born. At that time, a Mexican general in exile brought a resin that he hoped to work with the Americans to develop as a cheap rubber substitute to profit from it and use it as capital to return to power. Adams, a New Yorker who worked with him, repeatedly failed to experiment, but came up with the idea of making the resin into chewing gum. So he made the resin into strips and wrapped it in sugar paper, which was very well received. Two years later, he invented a machine specializing in making chewing gum, and chewing gum began to be transferred to large-scale machine production.
The exiled Mexican general did not make a penny in this business, lost hope of a comeback, and died of depression.
In 1870, chewing gum flavored with licorice and changed from lumps to strips was introduced and became very popular. During World War II, chewing gum was discovered to relieve stress, and military orders flocked to it, triggering growth in the civilian market. In the 1950s, sugar-free chewing gum came out.
Second, Buffett's "first pot of gold"
For years, chewing gum has been one of Americans' entrepreneurial attempts, and even Buffett's "first" came from chewing gum.
Buffett was born in 1930 and started his own investment business in 1956, but before that, his first business was selling chewing gum. He was four years old, and his aunt gave him a beautiful little tray, divided into five compartments, which could hold five different flavors of chewing gum. He went to Grandpa's grocery store and wholesaled 20 packets of chewing gum for 3 cents each, choosing five to put in trays and the others in backpacks. Every evening, he carries a small backpack and a small tray and sells it around his home. In the United States in 1934, not only was it sparsely populated, but there were no large supermarkets or convenience stores, only scattered convenience stores, and no one would go to the grocery store specifically to buy chewing gum. As a result, people are more willing to pay 5 cents and buy buffett's door-to-door chewing gum.
When a neighbor plans to buy him a piece of chewing gum, Buffett says that he will not sell it in pieces, but will sell it whole package. He said that this kind of thinking of only doing big business has affected him for a lifetime.
Buffett's relationship with chewing gum doesn't end. In 2008, he teamed up with Mars to acquire the chewing gum brand sold at the age of 4 for a total purchase price of $23 billion. Yes, this brand is the famous Wrigley chewing gum.
Of course, the story is still not over. In 2016, Mars announced that it had bought the remaining stake in Wrigley from Buffett to cement its leading position in the $177 billion snack market.
Third, Wrigley, which once occupied 85% of the Chinese market
Wrigley has 19 factories around the world and is headquartered in Chicago, USA. On April 1, 1891, the American William Regent Jr. founded Wrigley. His choice of the gum business was by accident, because his family was originally in the soap business, and when he was responsible for selling soap in Chicago, he chose to buy soap and give baking powder. Soon after, he found that retailers preferred baking powder, so he began to sell baking powder exclusively, and chose to buy baking powder and give chewing gum. As a result, he found that everyone seemed to prefer the relatively fresh thing of chewing gum, and even paid for it directly. So he began to specialize in making and selling chewing gum.
In the years since, Wrigley has grown to become the world's largest producer and seller of chewing gum. During World War II, the market competitiveness was maintained through military demand (during which Wrigley was discontinued due to the lack of raw materials during the war, and the temporary brand was replaced by a temporary brand, which reflected the style of pursuing quality), and in the 1960s, it reversed the decline with the introduction of mint-flavored chewing gum. In the European and American markets, Wrigley once occupied half of the country, and its share in many European countries was as high as 80%.
In 1989, Wrigley set up a factory in China, becoming the first true brand in the Chinese chewing gum market, and the early big bubble gum was simply the collective memory of a generation. The earliest memory of today's young people for Wrigley may be the green arrows that were full of advertisements in those days, but if they are older, they should remember that the earliest Wrigley was three arrows at the same time - green arrows, yellow arrows and white arrows sold together.
Yellow Arrow and White Arrow are actually Wrigley's most historic products, both born in 1893 and have a history of more than 100 years. Yellow Arrow is the first fresh fruit flavored chewing gum brand in the United States and the favorite chewing gum product for American children. The white arrow is a lingering fragrance, which is quite fresh.
But why did the mint-flavored Green Arrow laugh to the end? The powerful flavor freshness effect of peppermint is certainly a big reason, but more importantly, the advertising effect. Green Arrow, which adheres to the "fresh breath + communication" route, has many good advertising words over the years. In 2013, the "Make a Friend" advertisement made Green Arrow's sales reach 5.5 billion yuan that year, and the brother who came up with this advertising idea was awarded 6 million yuan.
Another product of Wrigley and Green Arrow is also famous for advertising, and it is also a star series advertisement, which is Yida. In addition, the brand awareness of Wrigley's Jinlang is also very high.
Before 2005, Wrigley became popular with Green Arrow and occupied most of the Chinese chewing gum market. But with the popularity of xylitol chewing gum, Rakuten of Japan and Hollywood of South Korea have pried away 20% of their share at Wrigley. In order to deal with Lotte and Haoliyou, Wrigley focused on Yida and consolidated its absolute advantage in the Chinese market. Launched in the United States in 1984, Yida became the world's no.1 sugar-free chewing gum brand within a few years. In 1996, it had been test-marketed in the Chinese market, and in 2002 it had occupied a considerable part of the market share. In the face of the attack of Lotte and Haoliyou, Wrigley further tilted the focus of promotion to Yida, but it further fulfilled the Yida myth.
Today, Wrigley's channels have spread throughout China's urban and rural areas, even in rural commissaries. In addition to the two traditional channels of stores and supermarkets, channels such as KTV have long been opened. According to statistics, Wrigley has more than one million sales points in China.
Fourth, a bitter battle that began in 2012
Although Lotte and Hollywood once had a share of the xylitol gum market, with the launch of the advertisement of Yida, their status on Wrigley has become powerless. The chewing gum market returned to a state of monopoly by Wrigley until 2012.
This time, Wrigley faces an enemy that can be regarded as a behemoth , Kraft, the second largest food company in the United States. Some people may not be familiar with the name Kraft, but Kraft's sub-brands are very familiar to everyone, such as Oreo, Lezhi, Yikoulian and Maxwell. Under Kraft's umbrella, there are as many as 11 sub-brands with annual sales of more than one billion US dollars.
Kraft once gave up the candy business, and the successor was Precisely Wrigley. But after that, the candy market grew rapidly, and Kraft, who was committed to biscuits, coffee and other fields, began to regret it. In 2010, it bought Cadbury, the world's second-largest confectioner, for £12 billion, and its net profit soared 54% in the quarter, ranking first among the world's confectioners. Of course, Wrigley was not idle at this time, as mentioned earlier, it was acquired by Buffett and Mars in 2008.
In Kraft's view, chewing gum is the product with the largest development space in the confectionery market and a higher profit margin. Soon, Kraft's chewing gum business expanded from Europe and the United States to China, named Mondelëz, and introduced Xuanmai, which is also familiar to everyone.
Even if you're a regular consumer of Rakuten and Hollyo's xylitol gum, you probably won't notice that they have strips of chewing gum products, right? We are more common in bottled chewing gum, and as for strips of chewing gum, Wrigley is almost completely monopolized, especially the familiar Green Arrow. In this case, newcomers will generally choose to take a detour, but Kraft chooses to be tough, first entering the market with strips of chewing gum, and with its chic box packaging, it is different from the same as the green arrow.
Wrigley is a master of marketing, and the same is true of Hyunmai. Before entering China, it launched a national "Enduring Challenge" campaign across the United States, where hundreds of young people uploaded homemade videos online to participate in the "Enduring Outrageous Challenge" of Xuanmai. In Japan, Hyunmai invited Narimiya Hiroki, who became a superstar with his exaggerated performance in "Extreme Path Fresh Master", to launch a funny short film in which Hyunmai and ape-man co-evolved. In August 2012, Hyunmai also advertised a mock Apple new machine in the Soho neighborhood of Manhattan to promote its new chewing gum products.
After coming to China, Xuanmai maintained a funny style, which was very different from Yida's warm route. The series of advertisements that are "outrageously long" and "can't stop at all", the scene of chewing chewing gum and constantly turning to penetrate several floors, can be regarded as deeply rooted in people's hearts, and "can't stop at all" has even become an Internet buzzword, comparable to "your Yida". In addition, marketing campaigns such as Xuanmai's "Challenge 1 Billion Chewing Minutes" can also be regarded as classic marketing in the chewing gum market. At the same time, Xuanmai's advertised "long-lasting chewing" does target the weaknesses of competitors.
However, the experienced Wrigley, although nervous, did not panic. It first introduced Wrigley 5 gum, also in boxed form. Interestingly, because of its resemblance to condoms, and the fact that it is placed in the terminal area with condoms in supermarkets and convenience stores, and the promotional slogan is "Touch , Thrill", it was misunderstood by many consumers when it was listed in Hong Kong.
Wrigley 5 gum also implanted a game with an adventure question attached to the packaging of each piece of gum, such as "Shoot ugly faces with the boss to send a circle of friends", "Put the boss on a sliding chair and push it out", etc. You can chew gum while playing a big adventure, and shake the dazzling online social interaction with the mode of real social interaction.
This competition continues to this day. In terms of market share, Wrigley still has more than 50% of the market, which has a great advantage, and the green arrow with "fresh taste" has become a social tool, and Yida, which is known for its warm advertising, is also full of topicality. However, Mondelëz, which is mainly based on the two major series of Xuanmai and Qingzhi, is not much inferior, and the marketing war between the two sides has never stopped, and the advertising creativity is endless.
Fifth, even if it declines, it is still a large market of more than 10 billion
Worldwide, the confectionery industry is in a period of adjustment, with sales declining year on year. But in China, the size of the chewing gum market has reached 13 billion yuan, becoming the second largest chewing gum market in the world.
Chewing gum producers are not resting easy, they have to face the dilemma of the point of sale. In recent years, sales volume and foot traffic across the global brick-and-mortar retail channel have declined. In China, where online shopping is developed, the sales growth rate of its chain supermarket top 100 is also declining year by year, and the growth rate in 2011 reached 21%, but in 2015, it dropped to 5%. The most important sales terminal of chewing gum is the supermarket, and 90% of the supermarket sales come from the "impulse consumption" on the side of the cash register, when people no longer like to visit the supermarket, or enter the supermarket but look down at the mobile phone while queuing up to buy a single, the sales pressure of chewing gum can be imagined.
But the opportunity is still there, in 2015, when the Qingzhi series landed in China, industry insiders analyzed that as the world's second largest chewing gum market with a scale of 13 billion yuan, the Chinese market seems to be saturated, but there is a lot of space. The top three countries in the world with the largest per capita chewing gum consumption are all above $20 per capita, and China has only 1/10 of it. If you can find a better sales terminal for chewing gum, then this market is still a blue ocean.
This article represents the personal position of the author only and does not constitute investment advice.